Fixed Income Market Overview
The yield on the benchmark 10-year Treasury note declined to 4.209%, influenced by recent data indicating easing inflation. Specifically, the producer price index fell 0.2% in May, contrary to expectations of a 0.1% rise, signaling reduced inflationary pressures. Additionally, initial jobless claims reached a 10-month high, and consumer prices remained flat for May. These factors have led investors to anticipate potential interest rate cuts from the Federal Reserve, as evidenced by increased confidence reflected in Treasury yields.Consequently, the Federal Reserve maintained interest rates at 5.25% to 5.50%, projecting only one cut this year.
Bank of Japan set to reduce JGB purchases, stands pat on interest rate.
Bond traders worry liquidity will worsen as US market size grows.
China new bank loans rise in May, but well below forecasts.
Microsoft to delay launch of AI Recall tool due to security concerns.
U.S. crude oil on pace to snap three-week losing streak on tighter market.
Major Indicies
| Symbol | Price | Change | %Change |
|---|---|---|---|
| DJIA | 38,589.16 | -57.94 | -0.15%↓ |
| NASDAQ | 19,659.80 | 82.88 | 0.42%↑ |
| S&P 500 | 5,431.60 | -2.14 | -0.04%↓ |
| NIKKEI | 38,814.56 | 94.09 | 0.24%↑ |
| HSI | 17,941.78 | -170.85 | -0.94%↓ |
| VIX | 12.66 | 0.72 | 6.03%↑ |
Bonds
| Name | Yeild | CHG |
|---|---|---|
| US 10-YR | 4.23% | -0.02 |
| US 30-YR | 4.35% | -0.05 |
| US 5-YR | 4.25% | 0.00 |
| JPN 10-YR | 0.94% | -0.03 |
| UK 10-YR | 4.06% | -0.07 |
Futures & Commodities
| Name | Last | Change | %Change |
|---|---|---|---|
| WTI CRUDE | 78.45 | -0.17 | -0.22%↓ |
| NAT GAS | 2.881 | -0.078 | -2.64%↓ |
| GOLD | 2,349.10 | 31.10 | 1.34%↑ |
| SILVER | 29.47 | 0.41 | 1.40%↑ |
| COPPER | 4.495 | 0.014 | 0.30%↑ |
Equity Market Overview
Adobe
Adobe shares surged 17% in extended trading after the company reported better-thanexpected earnings and revenue, and raised its full-year guidance. For the quarter ending May 31, Adobe posted adjusted earnings per share of $4.48 and revenue of $5.31 billion, surpassing LSEG expectations. The company’s revenue grew 10% year over year. Adobe projected fiscal third-quarter adjusted earnings of $4.50 to $4.55 per share on $5.33 billion to $5.38 billion in revenue. It also increased its full-year outlook, forecasting adjusted earnings between $18.00 and $18.20 per share and revenue between $21.40 billion and $21.50 billion. Adobe highlighted strong adoption of AI features in its Creative Cloud and Document Cloud services.
Euopean Equities
European stocks declined sharply on Friday, with the Stoxx 600 index falling 0.95% and over 2% for the week. French stocks dropped 2.7%, driven by investor anxiety over potential electoral success for the far-right National Rally party following President Macron’s call for parliamentary elections. U.S. stocks also declined, despite earlier gains, even as the S&P 500 remained set for a weekly increase. Softer-than-expected U.S. inflation data and the Federal Reserve’s steady interest rates influenced these movements, with expectations of rate reductions persisting. Auto stocks were impacted by the EU’s higher tariffs on Chinese EVs and a UK emissions probe. In Asia, Japanese markets rebounded after the Bank of Japan maintained its interest rate but hinted at reducing bond purchases.
Toyota
Toyota, Japan’s largest carmaker, has been under scrutiny for falsifying test certification applications, a scandal affecting five major Japanese auto firms including Toyota, Mazda, Honda, Suzuki, and Yamaha. This is not Toyota’s first safety scandal; previous issues involved its subsidiary, Daihatsu, and emissions falsifications by Hino. Following the revelations, Toyota’s stock fell significantly, losing $15.62 billion in market value. Toyota halted shipments of three models and apologized publicly. Despite the drop in share prices, analysts believe the long-term impact on the sector will be minimal.
